 Hello everyone, welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm Eastern Time. Before I get started, I need to go through the Disclosures, General Disclosure. All Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk Disclosure, trading futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. As a reminder, the focus of my presentation and the focus of the Options with Doug chat channel and Discord is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. I have a two-step process for trading and the first is planning and I use positional analysis and I look at how traders and market makers are positioned in the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day is top ESH3 CME cell 475 as well as a directional bias. The second step in my process is execution and I look at real-time order flow in Bookmap and real-time market maker hedging flow in SpotGamma Hero to confirm my thesis and for entries and exits for setups. And questions and comments are welcome. That's on topic questions and comments and please post your questions and comments in the Options with Doug chat channel and Discord and the chat in YouTube and I'll be watching both for your questions and comments. And what I want to talk about today, first of all, go over news items, economic data, events and earnings, then we'll go through our positional analysis and then talk about setups. So first of all, and let me go into, I need to make a change in setting here in Bookmap, turn these alerts off so I don't hear them. Okay, so what I want to talk about today, economic data, events and earnings, additional analysis and then setups. So first of all, the news items, economic data, not much this week. So the only economic data of significance is on Friday, the consumer sentiment at 10 a.m. Eastern time. And of course today there was the Powell speech. Seeing the impact of that right now, very interesting, jump higher, reversal lower. So there's the market, AP or BP before Powell and then AP after Powell. And most of my prep and analysis was done BP before Powell. Okay, so again the Powell speech, 12.40 p.m. Eastern time. Obviously initially traders interpreted what he had to say is bullish and then he must have said something else and they reversed lower. So for the rest of the week, so that's the primary event of the week. There are some other Fed speakers throughout the week and then some minor earnings. The ones stocks that I look at, Disney, Uber, Lyft, PayPal, all reporting this week. But the big earnings reports were for the stocks that I follow for last week. So next week there is some significant data and events. So on 214, the CPI, so that's a week from today, Tuesday, CPI report, 8.30 a.m. Eastern time. Then on Wednesday, 215, that's the VIX expiration. And then on Friday is the monthly options expiration. So that's Friday the 17th, that's the February monthly expiration. Okay, so let's go through our positional analysis now and let's start. So this is book map and we'll drill down to this. So I want to start with a longer term chart. So this is SPX and thinkorswim and it's a one-hour chart, 20-day one-hour chart showing this nice uptrend in SPX. And what I'm showing are the spot gamma levels for today in these horizontal, excuse me, in the horizontal red line. So these are provided for spot gamma subscribers. You have to manually update these in a think script. But anyway, these are the levels for today. So that's the 20-day chart showing the levels in play. There's the 4,200 SPX, 4,200 call wall, and the 3,900 put wall way down below. So the levels that were in play today were the 4,100 level and then around 4,150 to 4,160. So let's go in and look at another thinkorswim chart in a smaller time frame. And I'm doing this just to show the levels. So it takes out everything else. It's just price and levels. So this is, again, BP, AP, before pile, after pile. And this level is not shown on the chart. I drew this line. This was a support resistance line that was noted in the spot gamma AM founders note. And SPX jumped up to that level and then reversed lower. So that is the SPX in a one-minute chart in thinkorswim. All right, let's go take a look at book wrap now. The reason, one reason I'm looking at those charts is because the SPX levels are accurate. Those are the actual SPX levels. What I'm showing here in book map, I have two columns of levels. This is the spot gamma cloud notes that are provided for spot gamma subscribers. They're updated daily, automatically. Right now, spot gamma is using a 15-point difference between SPX and SPI. So these levels are showing SPX levels. There's the 4150 and also combo levels, SPI and SPX. And they're converted to equivalent ES numbers. And again, spot gamma is using a 15-point difference. And that difference is smaller today. It looked like it was around 12 or 13, or around 12 points, maybe even a little bit lower. So it gradually decreases over time. So these levels are shown a little bit high. And in this column, this C levels column, this is my, these are my cloud notes. And I'm showing the support and resistance levels that were noted in the spot gamma AM founders note. And I'm sticking with their 15-point difference. I'm also showing big ES round numbers and then important SPI levels. And these are close to, these are correct. So there's the SPI 410 key gamma strike and the 409 volatility trigger. So those are the levels on my chart and book map. And as we saw, the important level today was that SPX 4160 resistance level. And notice this morning, all of the volume concentrated at this SPI 409 and SPX 4100 level. Okay, so those are the levels that are in play for today. And shifts on levels, there really weren't any. So recall yesterday was a very narrow trading range consolidation after a large move last week. And there was only one minor shift in levels. That was the SPX volatility trigger shifted up from 4020 to 4060. And then for QQQ, the volatility trigger shifted down one point from 304 to 303. So pretty insignificant. All right, let's take a look at the gamma levels. So start with S&P 500. This is SPX and this is the absolute gamma levels. This is the zero line. So what we're looking at here is positive gamma or a call gamma shown by the black bars that's above the zero line. And negative gamma or put gamma below the zero line that's shown by the teal bars. So this is showing for SPX that 4000 is still the absolute gamma strike. That's very obvious, the strike with the largest absolute gamma. And then the 3,900 put wall is down here. And the 4,200 call wall is up above. So the put wall is the strike with the largest net negative gamma. And that can be expected to act as support. And the 4,200 level, the call wall is the strike with the largest net positive gamma. And that can be expected to act as resistance. So one thing to note here for SPX. Again, here's the 4,000 level and note the call gamma above. So positive gamma and SPX is still in a positive gamma. That's market makers position on the gamma curve is still positive. And for SPY, 4,10 is the key gamma strike. Strike with the largest absolute gamma. 400 is the put wall. And that's the strike with the largest net negative gamma. And that's pretty obvious. And then the call wall is up here at 4,20. So again, it's notable the call gamma above the 4,10 level. And a good amount of put gamma or negative gamma below that level. So SPY is still in a market makers position on the gamma curve for SPY is still negative. In a negative gamma environment. Let's take a look at QQQ. So for QQQ, the key gamma strike 300. That is also the put wall. And then 3,10 is the call wall. So QQQ market makers position on the gamma curve is slightly negative now. And again, it's somewhat notable that all the put gamma below call gamma above the 300 level. All right, so let's take a look at data now. And just a reminder, I'm doing all this. This is normally what I do before the market opens. This is my preparation or planning positional analysis. And I'll go over this and then we'll start looking at setups. So here's gamma notional. This is market makers position on the gamma curve SPX in this left column here. Shown as that's positive SPY and then QQQ on the far right. So all of these levels shifted down or more negative from yesterday. So yesterday SPX gamma notional was 371 and shifted down to 256 today. And SPY gamma notional yesterday was minus 561 and shifted more negative to minus 776. And then yesterday gamma notional for QQQ was minus 9 and today it's minus 83. So these numbers were on Friday, they were even more positive. So from Friday to Monday, the shift has been negative. And then from Monday to Tuesday, the shift has been more negative. So shifting down on the gamma curve for all these instruments. And what that means in a negative gamma environment, negative market makers position on the gamma curve, let's say for SPY there with minus 776, that means that traders are long puts, market makers are short puts, and as price drops, they have to sell futures to hedge their delta exposure. And then when price increases, their delta exposure decreases and they can buy back those short futures. And then on the other hand, in a positive gamma environment, that means that traders are short calls, this is what SPY gamma assumes, that traders are short calls, market makers are long calls, and as price increases, they have to sell futures to hedge their delta exposure. So in a positive gamma environment, they are trading against price and in a negative gamma environment, they are trading with price. So positive gamma that tends to reduce volatility and then a negative gamma environment that tends to increase volatility since market makers are trading with price. Let's take a look at the Vana charts. And this is a graphical representation of what I was just talking about. So the way to interpret this, market makers delta notional or delta exposure is shown on the vertical axis. Price is shown on the horizontal axis. And then this green line is the current expiration, and that is showing how market makers delta notional changes in price and implied volatility. And that is the Vana effect, the change in implied delta as implied volatility changes. So for SPX, again, recall it's in a positive market makers position. The gamma curve for SPX is positive. So their delta notional increases as price increases and they have to sell futures. So again, trading against price. And then the black line shows how that delta exposure changes as time passes. And that's the charm effect. And charm is the change in delta as time passes. So for SPY, it's just the opposite. Negative gamma environment and the gamma, this Vana model shifts higher as price decreases. And then for QQQ, it's pretty neutral. All right, one other thing to look at. This is my little spreadsheet that I keep every day, tracking the key gamma strike for all the stocks on my watch list. And I track the current key gamma strike. That's the key gamma strike for today. And then I compare that with the key gamma strike from yesterday. And then I color code these, either green or red. So red means that that key gamma strike dropped from the previous day. And green means that it increased from the previous day. So notice the, you know, the sharp difference between yesterday and today. So yesterday there were, this is based on the drop in the market on Friday. So this is what the, this was the current key gamma strikes for yesterday, for Monday. And then notice after the consolidation yesterday, the only key gamma strike that shifted lower was Google. Okay, so that's my positional analysis. And based on all this, just totally neutral. Not, you know, looking for a little bit more range than yesterday. And of course, this is all complicated by Powell speaking or, you know, complicated influenced by Powell speaking. But before that, my thesis for the day was, was neutral. There's no, no significant changes in levels for the S&P 500, QQQ, or all these stocks on my list. So more of just to wait and see, watch, watch what traders are doing, watch, watch hero and see what options traders are doing to make any decisions. Okay, let's take a look at some setups. Last time I checked, hero was not working. So that, that happens sometimes in times of volatility. I'm going to move this over to another screen and see if I can get it going again. If not, we'll just have to look at setups from, from the morning, which is pretty much what I have anyway. So I'm just going to refresh this, see if it's working now. Okay, it does seem to be working. I've got, yeah, I've got about the right time. So let me move this back over. Okay, so setups. And again, what I have, I do my, I did my prep for this in the morning and they were some good setups in the morning. So let's start with Apple. And what I'm looking at is this is the full day for Apple separate outputs and calls. And I was looking at this orange line showing that traders are buying calls. And it looks like in waves, this price continues to go higher. All right, let's take a look at book map. And we'll get to the S&P 500. So here's Apple and recall traders were buying calls. Nice thing about trading stocks. These targets are very visible. Let me just move. I'm going to get rid of these, these little widgets. This is the market pulse indicator. So showing strong uptrend in the morning as traders are buying calls with the price targets above. It looks like it took the Powell speech to get price up to that level to those levels, the 154 level and then the 155 call wall here. And the thing to note about stocks is that liquidity often comes in right at the cash open and just stay there until they get filled. And these high liquidity levels, especially at spot gamma levels, make great price targets. So remember, traders buying calls, price targets above, fairly bullish order flow, plenty of green dots, rising CVD. And I just look for pullback entries. Notice all the green dots here, the pullback and test of 152. Pullback to VWAP, right before Powell. Alright, so that's Apple. Next was AMD. Let's look at, let's go look at Hero for AMD. And I'm just going to go on alphabetical order here. Alright, so here's AMD and one thing to note. Let's see, so traders are selling calls and buying puts, as they were this morning. So I'm looking at the morning session here and just the opposite of Apple. Market negative hedging flow is, oops, got the wrong thing, bearish, negative delta and prices moving lower. Let's go take a look at book map now. There's AMD and this is not a large move, kind of overshadowed by the AP move. So there's the trend lower down to the 83 hedge wall. So about a point and a half from the open, down to the 83 hedge wall, all the liquidity there. Alright, then the next Amazon. Let's go take a look at Hero now. Amazon. And in the morning for this down move, there initially was not a confirmation. Traders were buying calls and selling puts and then they briefly stopped buying calls, they sold calls. Then they started buying calls again and price reversed higher a few minutes later, somewhere between 10, 10 and 1015. So nice call divergence, long set up in Amazon. Let's go take a look at book map again. So there's the long set up and notice the shift in order flow here. The absorption and all the green dots coming in. The green dots are market buy orders, aggressive buyers coming in. As price dropped down to the 99 level, price breaks that trend line, reverses higher, makes it up to the 100 level. That's the put wall and the key gamma strike. So an important level and not a lot of range for this up move. But clearly signaled with a long call divergence. Traders start buying calls and then price moved up a few minutes later and confirmed by order flow here. Again with all the green dots and the trend break with a target at the 100 level, key gamma strike above. Let's go back and take a look at Hero again. So again a pretty clear divergence there. Traders start buying calls and then price starts moving higher as traders start selling puts. That's shown by the rising blue line. So rising orange line traders are buying calls, rising blue line traders are selling puts and price starts to move higher. Alright the next one is Coinbase and looks like that's driven by puts. So traders buying puts, not doing much with calls. So about 8 times the delta volume delta 16.7 versus 2.2 for calls. So 16.7 for puts, 2.2 for calls. Puts are driving, it's pretty obvious graphically. And let's take a look at Coinbase here. So I just moved this over to my main computer today. So I have not had time to update C levels on this chart. So I don't have the levels shown on this chart yet. But strong downtrend in the morning. Let's go back and take a look at Hero and see if there are any. So 70 is the key gamma strike. So here's the key gamma strike, this level right here. And that looks like the area highest volume concentrated at that 70 level and just below. Look at Hero. And Coinbase is a stock that has been in play recently and pretty much always shows a pretty strong correlation between options trades and excuse me options trades hedging flow and price action. Alright now let's get to the S&P 500. So this is what I saw this morning and it took a long time to play out. This divergence higher. So price chopped around quite a bit until finally moving higher around 11 o'clock, something like that. So again took quite a long time to play out. Let's take a look at book map. We'll start with the S. So here's all the chop. I'm going to zoom in on the BP section. So here's all the chop this morning. I saw this there was a prices making lower highs and then broke that and then did one final retest. This final leg down. See all the all the pink dots in there. Aggressive sellers reversing down from around the 4100 level. Then aggressive buyers come in and start to move price higher. Starting a stop run that's shown by this rising rising yellow line. Something triggered this move higher and then all these stops fired off driving the move higher. So 957 contracts were by stop orders and then one clue that this might move higher were these iceberg orders that's shown with this small blue symbol E693 contracts iceberg orders 693 contracts executed and iceberg orders are orders that large traders use to hide their size. So that was a good clue that price might start to move higher. So then just watching the order flow and the price structure and waiting for that break higher. That's an ES again BP. Let's take a look at spy and pretty much the same move. I'm going to zoom in and remember these levels are more accurate on this chart. I checked the SPX to spy ratio today and I have noted the key SPX levels on my chart and again they're more accurate today. So this is showing the trend break then a final retest of the SPX 4100 and the C5 level the combo 5 level just below that. That's shown by the blue line and the white line there and there's that final retest before the price moves higher and good for about a point and a half or so maybe two points and spy. So there's spy so price went up to the 415 level and actually I'm not sure why that's shown and that should not be white. That's just a big round number level 415 but price reversed at that level and you can see the shift from green dots to pink dots. So absorption of that level and aggressive sellers come in and start to move price lower. So prices move from the 415 level actually from the 410 keygam strike to the 415 level and then down to the 408 C5 level did another retest and now is moving higher again. So I would imagine that Powell has finished speaking at this point and now the dip buyers have come in. So this is one reason I like to look at a spy chart it's often a little bit easier to read it doesn't have as much information as ES spy ES and SPX well the S&P 500 responds to SPX levels and spy levels round number levels quite frequently so that's why it's important that's why I have both on my charts. Alright let's go back and take a look at hero now so there was the morning set up the divergence that took a while to play out I was responding later and let's zoom in now and see what traders are doing I'm going to change to a shorter look back period let's change to 30 minutes so that really doesn't provide much clarity yeah it does if we get in close enough so here right before Powell started speaking traders started taking positive delta positions and that's shown by the rising purple line and let's just see if we can get some clarity about what they were trading so they started selling puts first and then they started buying calls so this is a situation where it often helps to change the look back period to a shorter time frame in the afternoon when there's been a lot of price action so the changing back to this again the shorter look back period helps in this situation alright the next one was meta and strong correlation between options trades hedging activity hedging flow and price action and driven by calls traders are buying calls that's a powerful force that can drive a stock a lot higher traders buy calls market makers sell the calls and they have to buy stock to hedge their delta exposure alright let's take a look at book map now and there were some jump in meta after AP price reverse lower now just like the S&P 500 continues higher again and the price targets are very obvious at 188 liquidity and at 190 and more above at 191, 192 and then the big price target up there at 195 so meta has been continues to be bullish after reporting earnings last week and recall yesterday it was the only one only stock on my key gamma strike list with a green key gamma strike everything else read and meta key gamma strike increased to 200 so there's meta and the next one is Nvidia we'll take a quick look at Moderna short today, earlier today confirmation Microsoft confirmation long after a move down take a look at Microsoft and book map pretty volatile day in Microsoft with pretty deep pullback entries let's go take a closer look at hero again and there's the confirmation long right in this area and not as clear a read as meta and again deeper pullbacks let's go to Nvidia put some calls and traders were buying calls and as they started buying calls more aggressively price starts to shift higher let's go take a look at book map at Nvidia and I believe Nvidia did something like this yesterday pretty choppy for the first hour hour and a half and then finally Nvidia breaks out of its range I've shown it by this this rectangle here Nvidia finally just pretty similar to the S&P 500 makes a series of higher lows does a final retest and then moves higher and breaks out of the range with price targets up almost at every round number level a lot of liquidity above and now AP made it up to the 220 call wall before a reversing lower went back and checked the 213 level and now is heading higher let's go back and take a look at hero traders are doing now alright so there's a question in YouTube you just joined welcome can we take a look at SPX so we can take a look at SPX and hero we don't have that in book map that you can't actually trade SPX itself so we'll just look at SPX and hero but I will tell you that if you want an indication of what's going on in the S&P 500 you're better off looking at SPY or ES so regarding Nvidia there's not a lot of clue here so we'll look at Tesla and then I'll go back to the S&P 500 Tesla and as usual there's a very strong correlation between options trades hedging flow and price action and provided confirmation for both short and long entries shorts and longs let's take a look at book map Tesla and pretty choppy up and down day in Tesla trend break reversal higher trend break reversal higher trend break reversal higher and you can look at that just the opposite as well trend break reversal lower alright let's go back and take a look at look at the S&P 500 again we'll go back to let's actually go to SPY got a little more clarity here again the levels are closer to exact so let's take a look at hero and what I want to do is first take a look at SPX so this is SPX notice this number here this is in dollar terms so 82 million and also think of this as delta so price increasing is positive delta so positive delta in the morning then flattens out then it looks like it's rising again so SPX let's remember that number then we'll go to SPY so there this total number in 60 353 million so SPY options this dollar notional value is a lot higher in SPY than SPX so this is why I prefer to look at SPY Brent Kuchuba the founder of Spont Gamma has discussed that as well he prefers to look at SPY the SPX is I think it's still pit traded and SPY is definitely electronically traded and traders, market makers have to respond they don't know what's coming so they have to respond more quickly with SPY than they do with SPX and then the total signal we'll take a look at ES and this is a combined signal combining SPX and SPY options trades calls and puts into one signal and that's for ES so if I'm looking at ES and P500 I look at ES or SPY so okay let's take a look now at ES let's change this look back period so pretty wavy here and then chopping up and down and again recall when we looked at this a few minutes ago traders were taking positive delta positions and doing that again and so there's a question in discord trader AG just jumping in here late trading Powell great so what was the most important highlight I don't know if there was an important highlight today the positional analysis this morning was definitely neutral and not a lot happened until Powell started speaking and I don't know what he said I think he I heard that he initially said something like inflation is contained or I'm not sure what the exact words were and he must have said something else that sent price lower so based on gamma and gamma levels let's take a look at let's go back to book map and look at SPY I think it's most clear here that price jumped from the 410 key gamma strike straight up to 415 and this is this level should not be should not be white that was my mistake there so 415 and then reverses lower down to the 408 C5 level so those are the SPY levels so I think really the the keys were the levels in play and then let's take a look at SPX and this is the 4160 resistance level that was noted in the AM Founders note so let's let's just take a look at I'm going to go to I'm going to pop this up so let's go back to the thinkorswim chart and then pop up the levels so we can look at this so this 4160 level was noted it's not a it's not shown on this chart but it was a a level noted as resistance in the AM Founders note and for some reason the 4165 well actually this is the 4165ES is the 4150 level so this is not showing any and this is SPX in the left column here not showing any levels between 4150 and 4200 so we can one thing that we can do this is just on the fly here so I don't know if this is something that is going to be significant or not but what we can do is go to equity hub we'll go to SPX we'll take a look at the composite view and sometimes these 4160 level so that is where that resistance level comes from that inflection point and this is showing the spot gamma momentum indicator it is the showing the rate of change of gamma and often these inflection points can act as support and resistance levels so I think this is where that 4160 resistance level comes from and that is also let's just take a look at the founder's note that's probably also noted as SPY415 so let's go here so yeah that's where that that inflection point and this level right here so 4150 to 4160 that's SPY415 there you go SPY415 resistance that 4160 inflection point and the SPX composite view acted as resistance so the hero hedging activity was not a clear read for SPX this morning but the levels really helped so that's my take on it so anyway my time is up I think I've answered all the questions thanks for watching thanks for your questions and comments and I will see you tomorrow thanks again bye